Buccaneer_Energy_Limited_-_Annual_Report_2010

8/7/2019 Buccaneer_Energy_Limited_-_Annual_Report_2010

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1 | PAGE Bu y Lmd uL PO 2010

2010AAl EPot

ExPloE >DEVEloP >PoDCE


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OS

managing directors eport

& Operational Sar 4

directors eport 26

orporate overnance 44

itors nepenence declaration 52

Financial eport

ncoe Stateent 53

Stateent of Financial Position 54

Stateent of hanges in qit 55

Stateent of ash Flow 56

ote to the Financial Stateent 57

directors declaration 112

nepenent it eport 113

orporate director 118


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Buccaneer Energys grwh sraegy s

funded n he prgressve epansn f

and gas prducn and reserves by acqurng

neress n w cs, w rsk devepmen

prperes ha pssess sgnfcan underdeveped

upsde wh access esng nfrasrucure.

WHO iS Buccaneer & WHat dO We dO?


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managing directOrS rePOrt& OPeratiOnaL Summary


Buccr rgy Lt& ctrLL tts

Highlights of the year were as follows:

Successful work-over and re-establishment of production from Pompano SL 103229 # 1 well

Commenced development drilling at Lee County with initial 3 wells drilled

Established oil production from Lee County

Reduced debt from US$5.0 million to AUD$1.0 million

Acquired a signicant portfolio of onshore and offshore assets in the Cook Inlet, Alaska

Advanced process to obtain key permits in Alaska:

Drilling permitting commenced at North Middle Ground Shoal and North West Cook Inlet

Key long lead time air permit already granted

Signicantly expanded acquired lease positions in Alaska - North Middle Ground Shoal

(NMGS) and North West Cook Inlet (NWCI)

Unit applications lodged with the Alaskan Department of Natural Resources for both North

Middle Ground Shoal and North West Cook Inlet

Strong expected reserve increase in Alaskan leases

3-D acquired at North Middle Ground Shoal

Netherland Sewell appointed to conduct third party reserve report on North Middle

Ground Shoal and North West Cook Inlet

Reviewed numerous acquisition opportunities in Alaska, the Lower 48 and

international projects.

PrOductiOn OPeratiOnS

Pompano Project

Buccaneer 65% Working Interest

the Pompano Field Pope i loaed appoximael 28 mile ea of Po conno, texa and

appoximael 94 mile ohwe of Hoon, texa. the Pompano eld i loaed in he glf of

exio in appoximael 60 of wae.

the leae wee aqied fom he ae of texa b natexa. the eld poded appoximael 120

BcF of a beween 1968 and 2003.ne of he ke aaion of he poje wa he exiin podion

failiie and infae on he leae inldin he followin:

n exiin 4-pile podion plafom wih 25 million bi fee pe da of a podion

handlin apai and ohe aellie e onneed b ow line o he podion plafom, fom

whih new well an be dilled, ompleed and onneed o apidl iniiae podion and ale; and

an exiin a ahein pipeline povidin immediae ae fo a podion o he ale make.

the failiie have an eimaed eplaemen vale of appoximael us$15.0 million.


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SL 103229 # 1 Well

n obe 2008 he sL 103229 # 1 well wa h-in o awai a emedial wok-ove. the wok-ove wa

neea o eif a poo emen job beween he B sand (50 ne pa a beain and podive)and he lowe B-2 sand (wae beain). the inx of wae behind he ain fom he B-2 sand

boh and ha fomed and bide in he B sand ompleion ha inhibied a podion.

ddiionall and bide alo fomed in he hallowe 6700 sand ompleion alo eiin

podion.

n obe 2009 he wok-ove wa efll ompleed and podion wa e-eablihed fom

boh he B sand and 6700 sand, he B sand onain he majoi of he eeve in hi well.

sbeqen o he wok-ove he hallowe 6700 sand eaed podion de o a e-emeene of

he and podion ie expeiened la ea. the compan iniial anali, in onjnion wih

Hallibon, i ha he avel pak inalled din he wok-ove wa plaed in he inoe poiion.

e o wae podion fom hi sand, he emainin eeve do no appea valable enoh o

make fhe epai aemp.

SL 103230 # 1 Well

thi well onined o pode hoho he ea and i pefomane i a expeed.

Production Volumes

Podion qaniie fo he wo well fo he 12 monh peiod o he 30 Jne 2010 wee a follow:

Well Gas (MCF) - 2010 Oil (BO) - 2010 Gas (MCF) - 2009 Oil (BO) - 2009

sL 103229 # 1 1,027,143 717 247,725 234

sL 103230 # 1 797,564 65 1,213,466 433

toal 1,824,717 782 1,461,191 667

Well iliaion ae fo he 12 monh wee loe o 98.1%.

Lease Operating Costs

the majo omponen aoiaed wih Leae peain co ae inane hae fo wind om

damae fo ae held in he glf of exio. thee wa a inian ineae in hee hae in he

inane ea ha ommened in Jne 2009 de o he nmbe of majo, damain hiane in

he 2008 eaon. wa aniipaed ha inane o wold appeiabl deeae in he en

ea iven he benin 2009 hiane eaon howeve hi ha no oed a hi ime.

Pompano Reserves

the emainin reeve in he wo Pompano well enl on podion a a 30 Jne 2010 wee

a follow:

WellProven - 1P

BCFProbable

BCFTotal - 2P

BCFPossible

BCFTotal - 3P

BCF

sL 103229 # 1 3.491 1.350 4.841 0.500 5.341

sL 103230 # 1 1.654 1.851 3.505 0.500 4.005

toal Pompano 5.145 3.201 8.346 1.000 9.346

e o Banee 65% W 3.344 2.081 5.425 0.650 6.075

cen podion a he Pompano eld i a ombined 5 million bi fee pe da (mmfd) o he

100% Wokin nee.


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deVeLOPment OPeratiOnS

lEE Cot - ooE tExA

52.5% Working Interest

the Lee con poje i loaed appoximael 120 mile nohwe of Hoon, texa.

Hihlih of he poje ae a follow:

the compan dilled 3 well and ineeed hdoabon in all 3 well (Vik #1, Vik #2 and

lexande 1) a Lee con o dae;

the Vik # 2 owed a 511 BP ove 24 ho fom he veial well onl. the 1,500 2,000

hoizonal omponen of hi well wa pendin a he ime of hi epo;

the lexande # 1 owed a an aveae of 948 BP ove 72 ho fom he veial well onl.

the 2,700 hoizonal omponen of hi well had ommened a he ime of hi epo;

niial podion ae of 100 - 750+ BP on adjoinin leae fom 1400 f hoizonal

ompleion have been expeiened;

seimi and well mappin onm aeae in exellen appin poiion a all main ae

in chalk, Bda and dwad Fomaion;

Hold aaive p-dip leae poiion o all een dioveie leae poiion now oal 2,442

ae o.

f 22 een well b adjaen opeao hee have been onl 7 nefl well.

Schematic: PomPano field layout

not to Scale


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Lease Position

the compan hold a 52.5% wokin inee in Lee con poje loaed in enal texa, us.

the Lee con poje hold exellen poenial fo obainin inian eoveable amon ofoil and a, he main ae eevoi ae he in chalk, ale Fod shale, Bda and dwad

Fomaion.

the leae poiion i 25 mile fom he poli giddin Field ha ha poded 4.8 tcF of a and

750 million bael of oil fom he in chalk.

the compan ha ineaed he o leae poiion in he poje fom 890 ae o 2,442 ae

o, leain o have now inianl ineaed followin een efl well in he in

chalk on neihboin leae. the eimaed podive bain i now mol fll leaed.

ve he pa 18 monh he compan ha ndeaken a daa hain exeie wih 3 of i

neihbo in epe o he ehnial feae of well dilled in he aea in he in chalk. thi

eeah indiae ha iniial podion ae of 100 750+ BP have been ahieved alon end

wih appoximael 80% of well dilled o dae bein podive. Well lo how ha he in

chalk eion in he popoed Lee well loaion ae imila o veial in chalk eion in een

podive well.

seimi (2) and well mappin boh onm ha he en aeae i in an exellen appin

poiion a all he main ae fomaion bein he in chalk, Bda and dwad. thee ae

alo deepe ae in he coon Valle fomaion howeve hee ae will no be eed in he

popoed iniial well.

f 22 een well b adjaen opeao hee have been onl 7 nefl well. the compan

hold an aaive p-dip leae poiion o all een dioveie.

Development Scheduling

e o a land ae ie, weahe and i availabili he developmen of he Lee con poje

ha no been a mooh a manaemen wold have aniipaed. anaemen ae onden ha

he majoi of hee ie have been addeed.

the compan ondene in he poje and i onoin developmen i diven b he

demonaed peene of boh oil and a and he abili of hee hdoabon o ow a

ommeial ae a demonaed in he Vik 2, lexande # 1 well and b hid pa opeao

in he aea ha pode fom he ame fomaion.

thi pe of poje eqie a poe of ial and eo o deemine he be dillin andompleion mehod ha an be onienl epeaed ao he enie poje. the compan

eonie ha hi an be a fain poe b i onden ha one deemined he Lee

con poje will be a ewadin ommeial vene.


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ViC # 1 WEll

the Vik # 1 well pd on 15 eembe 2009 and eahed a oal deph of 6230 on 19 Jana 2010

and wie-line lo wee efll n. conien wih pe-dill expeaion, mliple zone

exhibied oil how.

thoe zone ae:

Lower Austin Chalk - 118 thee i abndan maeial indiain naal fae and he

ok exhibi a on, lih ble hdoabon inepeed o be

lih oil. the wieline lo indiae pooiie in he 8 12% ane,

whih i onideed ood fo he in chalk and i above pe dill

expeaion.

Eagle Ford Shale 140 the ale Fod i no a known pode in hi end, b i

podive of oil and a in texa. thi zone indiaed how of

hdoabon while dillin.

the ale Fod ok exhibi a lih ble hdoabon inepeed

a lih oil and hee wa a a ineae whil dillin.

thee i banial indiaion of naal fain in eveal hioiall podive fomaion a

well a hihe han pedied pooi. il and a how of vain qaliie and qaniie leal

indiae he peene of hdoabon in he em.

the el h fa ae onien wih well behavio elewhee in he in chalk, ale Fod

and geoeown Fomaion.

lee county location maP


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peviol advied, a pime oal of hi well wa o pove p ommeial hdoabon in

he leae poiion. n o opinion, hi oal ha been ahieved and jie fhe developmen of

he aeae.

Vick # 1 Pumping Operations and Plan

the compan eleed o omplee he well and plae i on podion wih pmpin eqipmen.

thi appoah emlae ohe efl well elewhee in he end ha have diplaed he

above haaeii while bein dilled and have been plaed on pmp and evenall beame

efl oil pode.

Baed on pmpin opeaion fom neab well i i he compan anali ha beween 15,000

20,000 bael of wae need o be mobilied pio o imlain oil ow.

f oil podion i no limael efl a Vik # 1 he compan will onide dillin a ideak

wihin he in chalk, a hoizonal well ino he ale Fod hale immediael below he inchalk o deepen he well o ae he deepe dwad and slio Fomaion.

ViC # A2 WEll

the Vik # 2 well pd on 29 pil 2010 and eahed a oal deph of 6030 on Fida 14 a 2010.

thi well wa planned a a hoizonal well b on ompleion of he veial emen he well

aed owin oil wiho imlaion, a 24 ho podion e wa onded whee i owed

511 BP. Baed on hee ow ae and pee a deiion wa made o omplee he well fo

podion a a veial well.

illuStratiVe only - not indicatiVe of Structure


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il podion wa e-eablihed afe ompleion of he well, howeve afe demonain he

iniial owin podion ae of 511 BP ove 24 ho, he dail ae and owin pee

wee eai indiain ha pmpin, (o aiiall lifin) he oil fom he well wold be eqied o

ahieve a moe onien podion ae. thi i pial of in chalk oil podion in he aea.

pmpin ni and down hole pmp wee inalled and podion e-eablihed, podion

ae onined o be eai and aned beween 3 140 BP.

the inenion i o e-ene he well boe and dill he oiinall planned 1,500 2,000

hoizonal emen.

Logging Operations

qad-ombo ie of lo oniin of ool o eod eiivi epone, amma a daa

and pooi meaemen wee n fom 5910 p o he ain a 5234.

the elin lo daa and he epone fom he in chalk and ale Fod shale fomaion

wee onien wih pe-dill expeaion. the in chalk eneall exhibied pooiie aond

6% wih ome zone eadin in he ane of 8-12% whih ae onideed ood fo he in chalk.

the loin ool wee nable o o below 5910 de o an obion and wee nable o povide

daa ove he lowe 40-50 of he ale Fod shale.

the md lo indiaed heav ae (c3c5), and oil fom he in chalk eion, boh

indiaive of liqid oil enein he well boe while dillin. the md lo alo indiae ha he ale

Fod hale will emain a zone of inee fo Banee a he oil how onined in ha fomaion

a well.

fae ideniaion lo wa alo n in he hole. oo wa nable o o below he 5910 level.the lo ha been inepeed and nmeo fae ae indiaed in boh he uppe and Lowe

in chalk. the loaion of he fae and he how of oil and heav ae ae inepeed o

be elaed.

nickloS #1 rig on Vick #2 location


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AlExADE # 1 WEll

the lexande # 1 well pd on 27 2010. the veial omponen of he well wa planned o

have a oal deph of 6,250 o e boh he in chalk and ale Fod hale.

n 9 sepembe 2010 he lexande # 1 well wa a 5,727 and aed o ow oil and a. the

en oil podion ha been inepeed fom md lo a bein fom a 20 hik ineval (5,640

5,660) in he middle of he in chalk. the a wa aed and he oil wa bein poded ino

ank on ie.

the well wa open hole podion eed ove 72 ho nil 12 sepembe 2010 and poded

2,846 bael of oil fo an aveae ow ae of 948 BP. the oil i 31 deee P, a lih de oil,

no fomaion wae wa poded. ga wa poded and aed.

thee i appoximael 300 of he in chalk expeed emainin o dill. the en inenion i o

kik off he 2,700 hoizonal a he en deph of 5,727. n he poe of bildin he anle fo he

hoizonal, he lowe eion of he in chalk hold be eed, deepenin hi well o he ale

Fod shale wa abandoned o limi an poenial ik o he podin in chalk eion.

CoPEtEt PEo tAtEEt

nfomaion onained in hi epo peainin o Lee con and Pompano poje wee ompiled

b ga rineha, Bs in geolo fom univei of klahoma and who ha had moe han 35 ea

expeiene in peolem eolo. rineha ha onened o he inlion in hi epo of he

ehnial mae and infomaion heein in he fom and onex in whih i appea.

flaring gaS at the alexander # 1 Well


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cOOK inLet, aLaSKa

n ah 2010 he compan exeed a bindin aeemen o aqie a 87.5 100% wokin inee

in a pofolio of 57,600 o ae of onhoe and offhoe leae fom sella il & ga, LLc

(sella), a pivae us baed ompan.

he ime of aqiiion he compan ha eviewed he ehnial daa and ha aeed he

pofolio a havin P10 eoe poenial of 1.1 tcF and 145 million bael of oil (B).

the leae ae in and aond he cook nle, laka. the aqiiion inaled he ommenemen

of an expanion b Banee ino a eion ha i ha idenied a inianl nde exploed.

the eion ha alo been idenied b nmeo independen die a havin he poenial o

ho addiional wold la eeve.

HigHLigHtS

The offshore leases adjoin or are adjacent to signicant projects currently in production and

owned by major companies, including ConocoPhillips and Chevron;

No technical hurdles exist to drill and develop reserves; usual state and federal regulatory

requirements will apply to project permitting.

Buccaneer acquires a full management team with a history of identifying, acquiring and

developing projects in Alaska;

The acquisition price is US$2.65 million to be paid in a combination of cash and Buccaneer

shares that will be subject to a voluntary escrow period;

Gas prices trade at ~40% premium to the remainder of the United States due to declining

production and increasing demand; and

State of Alaska offer signicant nancial incentives to new entrants into Alaska with rebatesof 45 - 65% on most direct exploration costs.

the popeive eoe, in million of bael of oil eqivalen (B), of he ae aqied

fom sella il & ga, LLc (sella) a he ime of aqiiion in ah 2010 wee a follow:

Project Location P10 P50

oh iddle gond shoal ffhoe 33.4 14.0

oh We cook nle ffhoe 143.0 73.6

We ale nhoe 80.0 20.0

Total - MMBOE 256.4 107.6

the offhoe eoe ae expeed o ineae de o expanded leae poiion and heinopoaion of 3 eimi daa a he oh iddle gond shoal poje.

OFFSHOre OPeratiOnS

ot iDDlE GoD oAl (G)

the gs eld i in appoximael 30 of wae wih no nal ehnial hdle o dill and

develop eeve. the gs eld i wihin 5-10 mile of fo inian oil and a eld a follow

(ee Fie 1):

tadin Ba Field wih podion o dae of 103 million B, 73 BcF of a and 360 hoand

bael of aal ga Liqid (gL);


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h rive Field wih podion o dae of 630 million B, 261 BcF of a and 9 million

bael of gL;

iddle gond shoal Field wih podion o dae of 198 million B and 93 BcF of a; and soh ganie Poin Field wih podion o dae of 147 million B and 131 BcF of a.

sine aqiin he iniial leae fom sella in ah 2010 he ompan ha expanded i leae

poiion fom a ne 1,280 ae o a ne 10,108 ae, hoh aqiiion and now onol 100% of

he gs e.

mpoanl, he compan now onol he leae on whih he Pan m -1 well

(gs sae 18743-1) wa dilled in 1964 and whih ow eed a (> 3 mmf/da) in he

Lowe tonek Fomaion fom one of hee a ineval idenied on dillin lo; hi well

alo had inian oil how in he Hemlok fomaion a he boom of he well. eihe he

a no oil wa poded de o ve low oil and a pie a ha ime.

Reserves

n aqiiion in ah 2010 he gs aeed P10 eeve wee 140 BcF of a and 14 million

bael of oil (B). the P50 eeve wee 60 BcF and 8 B. thee eeve ae expeed

o ineae and be paded de o he expanded leae poiion and he inopoaion of 3

eimi daa.

the compan ha appoined eheland sewell, one of he leadin us baed enineein m,

o omplee a hid pa enineein epo on he eeve fo gs and he compan expe

Poven, Pobable and Poible (3P) eeve o be ained.

thee i alo poible ae o he exiin Plafom appoximael 5 mile o he oh, hi wold

inianl ede apial expendie and ime o podion.

Drill Permitting

the pemiin poe o dill in he cook nle

ake appoximael 6-9 monh. the compan

ha ommened hi poe fo gs and ha

a deailed wok hedle o ha all pemi ae in

plae fo he ommenemen of he 2011 dillin

eaon ommenin in pil / a 2011.

Unit Application

ni appliaion fo gs ha been loded wih

he lakan r, nde hi appliaion he gs

poje will be enamed he sohen co uni.

the ni i expeed o be aned lae in he hid

qae of 2010 afe he eqied pbli ommen

poe ha been ndeaken.

the main advanae of ombinin he leae

poiion ino one ni i ha a inle diove

well and a plan of opeaion will allow fo efien

developmen of he ni aea wiho ead o

individal leae expiaion. ni i piall

aned fo 5 ea.

: , ,

Granite Point Field

Oil: 146,662,043 BBL

Gas:130,840,187 MCF

McArthur River Field

Oil: 629,960,444 BBL

Gas: 261,432,770 MCF

NGL: 8,978,879 BBL

Middle Ground Shoal Field

Oil: 197,589,339 BBL

Gas: 93,528,147 MCF

: , ,

: , ,

Redoubt Shoal Field

Oil: 2,354,700 BBL

: 7 , 2 M F

Trading Bay FieldOil: 102,873,692 BBLGas: 73,113,815 MCFNGL: 613,832,552 BBL

North

MiddleGroundShoa

FieldKITCHEN LIGHTS UNI

ESCOPETA

EDOUBT UNIT

OOKINLET ENERGY

TRADING BAYUNIT

UNIONOIL

S GRANITE POINT UNITUNIONOIL

N TRADING BAY UNITUNION OIL

S MIDDLE GROUND SHOAL UNIT

UNION OIL

C

A

ANNA

BRUCE

SPARK

SPURR

BAKER

DILLON

MONOPOD

GRAYLING

STEELHEAD

KINGSALMON

DOLLY VARDEN

GRANITEPOINT

PortNikiskiMA KE

ALA KA

KENAI PENI

Pan American

N MGS ST 18745 2

Placid Oil

State 17580 1

Pan AmericanE MGS ST 18751 1

Pan AmericanN MGS ST 18745 1Pan American

N MGS ST 18745 1-A

Atlantic RichfieldTrading Bay St. 2

COOK

INLET

4 il

n r l k L

l i il n r

r i n

l l r r ll

n r l k L i ii n

il l r

n ri l ilii

il ni n r

i lin

il i lin

i l

il i l

il i l

r i l

Pan AmericanMGS ST 18743 1

ll

figure 1: north middle ground Shoal,

cook inlet - alaSka


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ot WEt Coo ilEt (WCi)

the Wc poje i in appoximael 100 wae deph wih no nal ehnial hdle o dill

and develop eeve.

sine aqiin he iniial leae fom sella in ah 2010 he ompan ha expanded i leae

poiion fom a ne 6,648 ae o a ne 9,848, of a o 10,168 ae, hoh aqiiion and

leain aiviie a lakan sae Leae ion.

thi ne leae holdin epeen a 87.5 100% wokin inee in 6 blok, he emainin 12.5%

wokin inee i in j one of he blok ha he compan doe no own ae held b re and

Wilbank copoaion.

Reserves

he ime of aqiiion he aeed P10 eeve ae 576 BcF of a and 52 B. the P50

eeve ae 386 BcF and 35 B. the compan ha appoined eheland sewell o omplee ahid pa enineein epo on he eeve fo Wc.

Wc i ve loe o exiin infae, hi wold inianl ede apial expendie and

ime o podion.

Unit Application

ni appliaion fo Wc ha been loded wih he lakan r. the ni i expeed o be

aned lae in he hid qae of 2010 afe he eqied pbli ommen poe ha been

ndeaken.

NWCI Highlights

the leae adjoin conooPhillip oh cook nle eld ha i in podion and ha poded

1.8 illion bi (tcF) of a see Fie 2.

the compan leae offe an ealie well dilled in he ween poion of he oh cook nle

Field (conooPhillip) ha poded 85 BcF of a (Phillip # -13), hi well i le han 1 mile

fom he leae bonda.

the majoi of podion fom he oh cook nle eld ha ome fom he selin and

whih ae above 6,000 in deph. the lihl deepe Bela and uppe tonek Fomaion will

alo be a beain and hold be mol o oall n-dained in he noh-ween poion of

he e whih make p he ohwe cook nle Pope.

the Pope alo peen a deepe oil opponi. Field diove well eed oil in he

Lowe tonek and Hemlok Fomaion ha have neve been poded in he eld and ha

wold eqie a deepe, 14,000 foo exploao e.

Five well dilled b Phillip, shell, and o fond he deepe oil and. the shell well i he

mo nohel of hee e, and i fond and eed oil fom hee and, and i appoximael

1 mile fom he Pope.


15/119




"

ENST

AR(20")-

Ensta

r

3

MIL

ECK

(6")

-

Aro

ura

LONE CK (6") - Aroura

TYONEK NATIVE CORPORATION

BELUGA RIVER GENERATION PLANT

B

BB

B

B

BB B

B

B

B

B

LONE CREEK UNIT

AURORAGAS

BelugaRiverField

Gas: 1,154,457,872 MCF

IvanRiver Field

Gas: 80,632,804 MCF

Lone Creek Field

Gas: 7,777,767 MCF

Moquawkie Field

Gas: 4,363,310 MCFNorth Cook Inlet Field

Gas: 1,824,542,143 MCF

Pretty Creek Field

Gas: 10,410,192 MCF

ile Creek Field

23,383 MCF

SHELL OIL CO

N COOK INLET ST 1

PHILLIPS PETROLEUM CO

SUNFISH 3

CONOCOPHILLIPS ALASKA INC

N COOKINLET UNIT B-02


COOK INLET ST 18741 2

PAN AMERICAN



N COOK INLET UNIT B-01

ARCO ALASKA INC

NORTH FORELAND ST 1

PAN AMERICAN



COOK INLET ST 18740 1ARCO ALASKA INC

SUNFISH 1

N COOKINLETU

CONOCOPHILLIP

BELUGARIVERUNIT

CONOCOPHILLIPS

MOQUAWKIE UNIT

AURORAGAS

IVANRIVERUNIT

UNIONOIL

TYONEK

Tyonek

K

INLE

OnSHOre OPeratiOnS

o fhe wok on he We ale poje wa ndeaken din he qae, he poje i

deibed below. the Banee laka eam i in he poe of ondin de diliene on a

nmbe of onhoe poje ha ae exploao, developmen and in podion.

WEt EAGlE PoPECt

sella and i pedeeo ompanie have held ome of hee leae ine 2006 and have a

Wokin nee of 100%. the aeed P10 eeve ae 150 BcF of a and 13 million bael

of oil (B). the P50 eeve ae 100 BcF and 10 B.

the Pope inlde 9 sae Leae oallin moe han 44,000 ae and i on he eaen limb of

he cook nle Bain see Fie 3. the Pope i deined o e poenial oil on end o lihl

down-dip o, poible, loed oil pa in well dilled in he 1960. n h a poiion, he and

hold be hike and bee developed and on he miaion pahwa of an oil movin ino he

e.

ga i alo expeed in he hallowe eion. 2 eimi daa ha been ho in he aea and

need o be liened and inepeed. 10,000 e will be eqied o e he tonek (5,000; a

poenial) hoh he Hemlok (9,800; oil poenial).

figure 2: north WeSt cook inlet ProSPect - alaSka


16/119




the exploaion poenial i inian.

ppoximael 8 mile ea of union il

(chevon) ikolaevk/oh Fok ga uniand 10 mile ohea of he eep ceek

ga uni.

the exploao P10 a eeve ae

appoximael 150 BcF wihin he tonek

Fomaion. the P50 eeve ae 100 BcF.

the exploao P10 oil eeve ae

appoximael 13 B wihin he tonek

Fomaion. the P50 eeve ae 10 B.

WEt iColAi

the compan wholl owned bidia

Banee laka, LLc wa he appaen hih

bidde fo a ne 5,653 leae blok onhoe cook

nle, in he ae of laka cook nle leae ale

held in a 2010.

the We iolai pope i a 3-wa fal aied dip loe wih on anomalo eimi

amplide ein ha hdoabon ae apped in he hihl popeive Bela and tonek

and fond fom he fae o appoximael 5,000 fee.

the We iolai ceek a pope appea o be idenial in al and aiaphi haae

o he neab hallow nohen poion of he podin iolai ceek Field. the iolai ceek ga

Field ha nmeo 20 o 30 a pa zone beween 1000 and 3000. the We iolai lead i

pojeed o be analoo.

CoPEtEt PEo tAtEEt

nfomaion onained in hi epo peainin o he lakan poje wa eviewed b

. Vija Bania, Ph in Peolem nineein fom he univei of tla, who ha ove

30 ea expeiene inldin emplomen b shell il compan, union texa Peolem,

Blinon reoe and renaiane laka. . Bania ha appoved he inlion in hi epo

of he ehnial mae and infomaion heein in he fom and onex in whih i appea.

figure 3: WeSt eagle ProSPect - alaSka

"

Kachem

akBay

DEEP CREEK UNIT

UNIONOIL

POLITAN UNIT

NATURAL

CES

LAEVSK UNIT

UNION OIL

FORK UNIT

OOK INLET

Homer

nt

L

Miles

KENAI PENINSULA

ork Fieldt Development

Deep Creek Field

Gas: 14,430,588MCF

"Red" Well 1&2

Discovery

. ili

(x.

ut )

i l l i il n r

r i n

Hwy


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AlAA ClEA & EitABlE AE (ACE)

n ovembe 2007, he laka Leilae paed Hoe Bill 2001, known a laka clea and

qiable shae (cs). cs wa deined o develop and pomoe dillin aiviie in man oflaka napped loaion. the poam eeniall de-ik he poe of dillin off hoe in

laka, b povidin ompanie wih eneo ax inenive o develop exiin eoe in he

aea o eae he ineainl hih ene demand ve.

Available Programs:

Lo ca Fowad (LcF) 25% of pevio ea die leae expendie

eal all pendin fo he bene of a leae qalie

can appl on ah 31 followin ea of expendie

Half of he edi i available immediael wih he ohe half available in he nex alenda ea.

Capital Credits 20% o qualifed capital expenditures

o exploaion, developmen, and eimi pendin qalie

can appl qael.

Half of he edi i available immediael wih he ohe half available in he nex alenda ea.

Exploration activities

xploaion ax edi of 40% fo expendie ined oh of he oh slope.

cook nle Jak-p ri cedi100% p o $25 will be awaded o he ompan o dill an

off-hoe well in he nle, 90% p o $22.5 fo he eond ompan and 80% p o $20 fo

he hid ompan, all iliin he ame i.

nl available fo he 3 well dilled wih a Jak-p i o Pe-teia eion.

nlde i mobilizaion o.

nl one edi an be awaded o eah ompan.

f hdoabon ae efll fond, 50% of he ax edi m be paid bak fom he

pode o he sae ove a peiod of 10 ea; hee i no epamen neea if a d hole

i dilled.

Other Requirements and Highlights:

i poible o qalif fo moe han one edii.e. a eimi poam oide of a niqalie fo p o 65% bak fom he sae.

cedi an be old o he sae afe Jl 1, 2010 ($ fo $) o anfeed o ohe pode a a

neoiaed pie.

fe applin fo edi, i ake p o 120 da o ie he edi and hen anohe 30 da o

onve he edi ino ah.

ll dillin o, inldin he o of i mobilizaion whih an be eoveed hoh laka

ae ax edi ove wo ea, ae fll fnible and anfeable.

the above inenive appl iepeive of he e of an well o developmen poam.


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AlAA

hkchi Sea*

HopeBasin

ortonBasin

avarinBa

letian Basin

Bowers Basin

letian rc

Shagin

St. matthew-Hall

St. eorgeBasin

BristolBa

Koiak

lf

oflaska

ooknlet

Beafort Sea

DEPAtEt o itEiootE CotiEtAl El oil AD GA tAtEG

Curreny open fr Epran and Devepmen

Areas open fr Epran, udy, and Pena Devepmen

ewy Preced Areas

lw esurce Pena

oC Pannng Area Bundary

* Chukch ea ae 193 was hed n 2008, and he area has beendesgnaed fr sudy n he ne 5-year Ei, bu here are nfurher Chukch saes n he curren 5-year schedue.

ercarrh Amercan Daum 19830 40 80 120 1 60 200 es

0 20 40 80 120 160 200 auca es

otE:the arne bundares and ms s hwn abve, as weas he dvsn beween areas, are fr na pannngpurpses ny and d n prejudce r affec nedaes jurscn n any way.

OtHer deVeLOPment and eXPLOratiOn aSSetS

eailed below ae he addiional developmen and exploaion ae in he compan pofolio,

hee ae ae all loaed in hallow wae in he glf of exio. the compan onine o

make hee ae fo fam-in pane b will no move o dill hee nil a pie have

eoveed o be above us$6.00 / mf.

WoDi PoPAo ExtEio (Gl o ExiCo) 86.7% WoiG itEEt.

Banee exended i aeae poiion aond he Pompano Field din 2008 in i 3

eimi daa bae. the iniial fo i on he swodh Pope whih ha mliple objeive and

on amplide ppo fo a he B2, and and ineval all and ha have been fondpodive in he Pompano Field a well.

the exiin 3 eimi wa epoeed o enhane he feqen onen and impove eolion.

the el impoved he pope and a biion model indiae a hih pobabili ha

hee i a in all hee zone wih well ove 40 in he sand ha lie immediael above he

ovepee. the and ae of hih eevoi qali and he sand ha been podive in he

exiin B 479 Field whee i poded 3.7 BcF down dip on a fal ap ohea of Pompano.

the en eoe poenial in he sand alone ae eimaed a loe o 20 BcF wih a hih

hane of e. the pope ha ove 100 BcF of pide poenial wih wo loaion enl

idenied. the nomal pee objeive lie beween 7,000 and 8,500 and he , F and g

objeive ha ae well developed lie beween 8,500 and 9,500.


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EDi PoPECt PoPAo ExtEio

(Gl o ExiCo) 65% WoiG itEEt

n 31 ah 2008 he compan paiipaed in he bmiion of he hih bid on an addiional 720ae a adjaen o he Pompano poje a he texa sae Leae sale held on pil 1, 2008 in

in, texa.

the new leae will be deinaed sae Leae (sL) 108868 and ove he /2 /4 Bazo Blok

479L, ankin he Pompano Pope immediael oh of and onio o he sL 103230 leae

Pompano # 2 well wa dillin.

Banee aei pope eneain pane, illennim xploe, LLc, (X)

eommended phain he a a X ha wo dillin lead on he a ha i all he

redh Pope, and hee will be fhe evalaed wih an addiional 9 qae mile (23.3 q km)

3 eimi daa blok. the redh lead ae ome of he ame a and ha have alead been

poven podive in he Pompano dillin o dae.

the sae of texa eain a 25% oal b i leae em. Howeve, he aeemen allow fo a 5%

oal edi if he leae i plaed ino podion wihin he wo ea of he ve ea pima

em, o a 2.5% oal edi if he leae ommene podion din he hid o foh ea in

ode o pomoe pomp dillin.

tA/tAG 100% WoiG itEEt

thee blok ae loaed adjaen o he g 303 Field offhoe galveon land in 50 wae deph,

wih ove 40 poenial eevoi peen. 100% wokin inee wa aqied in he leae in he

eond half of 2008.

tna and tan povide an exiin opponi o develop mliple ae ha have poded o

eed a in he immediae aea and in tna hee ae 23 of pobable b-paed pa in 6 diffeen

and. the compan ha eimaed ove 130 BcFe of n-iked poenial and hee ae a minimm

of 3 dillin loaion idenied. the tan Pope ha objeive beween deph of 7,140 and

9,080 wih no nal dillin hazad and all objeive ae in nomal pee. tna will e he

eo-peed eion o a deph of 11,520. o exaodina poblem ae aniipaed baed on

pevio dillin in he aea.

JAGA 100% WoiG itEEt

thi i a blok wih wae deph of 50 ha he compan aqied 100% inee in an offhoe

leae ale whih onain ove 20 BcFe of Poved undeveloped reeve.

n addiion o a he pope ha onideable oil and ondenae poenial and hee i

inian addiional exploaion poenial wih n-iked poenial exeedin 100 BcFe.

the compan ha onideable exibili a he leae ha an iniial 5 ea em and he ompan

expe o nd pane o ppo a developmen dillin poam a he bine envionmen

impove. thee ae hee immediae loaion and 2 addiional loaion idenied.


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B 35.0% WoiG itEEt

the rb Pope i a lae opponi. go eoe poenial i eimaed a 200 BcF and ove

5 million bael. the pope aea lie ove and adjaen o a ian hallow eld ha ha podedove 500 BcF and 65 million bael of oil fom eevoi above 12,000 a well a he tex W pa

eion.

thi end ha poded ove 5 tcF of a and 500 mm bael and i aain lae bid fom

chevon o he we followin he een diove and e in he conano Field wih ome

800 BcF eeve epoed.

rb ha wo objeive; tex W a 12500 wih o Pu eeve of 6.1 BcF and 165,000 bael

a he loaion. thee ae mliple tex W loaion ha have a o n-iked pide of ove 50

BcF. the iniial ae fom offein podion well ane beween 10 -20 mmfd. thee ae

ovel he cib p objeive. the cib p whee peneaed i an exemel hik bain oo lobe

depoi 1000 1500 hik in ome well in he aea. the cib p povide onideabl lae pidewih hih iniial podion ae.

nfae i in plae. thee i 3 onol and eaonable well onol.

CoVE DEEP 32.0% WoiG itEEt

thi pope wa pa of he oiinal leae in he Banee Pofolio, and i i a low ik

exploao pope wih o n-iked poenial of ove 60 BcF. the pope i a fal ap

400 pdip fom a obil 7722 #1 well ha ha ove 200 hik siph sand and whih an be ied

eimiall ino he pope. the aaoda 519 Field ha poded ove 350 BcF fom a imila

zone wih imila amplide epone adjaen o he pope. ndividal well have poded a

mh a 60 BcF and podion ae an exeed 30 mmfd.

cOrPOrate

PiGtEE PECiAl oPPotitiE D

n 22 Feba 2010 he compan exeed a onveible loan faili wih ew yok baed

invemen fnd spintee speial pponiie Fnd, LP (he Fnd). the faili expie in

ah 2011 nle anelled pio o hi dae.

Summary of Funding Agreement

Access to Capital. the onveible noe fndin povide Banee ne wih eain of

ae o fndin in an neain apial make envionmen. the faili amon of p o $25.5

million i o be made available o he compan in ela anhe a follow:

$1.5 million advaned a he dae of he aeemen; and

12 addiional fndin anhe of beween $800,000 - $2.0 million, eah o be advaned

appoximael 30 da afe he immediael peedin anhe. mon above $800,000

an onl be advaned on mal aeemen beween boh paie.

Funding Without Large Debt Obligations.

the fndin anhe ae advaned o he compan monhl and epaid in hae

eah monh;


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he oal deb oandin a an one ime will be $800,000 - $2,000,000 dependin on he

amon advaned eah monh; and

no inee i paable.

Minimises Dilution. the anhe ae epaable in Banee ne hae, appoximael

monhl, ove a 12 monh peiod, whih allow Banee o ie hae a loe o he

make pie pevailin a he ime and poeniall a pemim o he en hae pie, h

minimiin he dilion fo exiin haeholde. n addiion o he monhl anhe, he

$750,000 of he iniial $1.5 million, dened a he niial tanhe, i epaable in odina hae

no lae han 22 Feba 2013, bje o haeholde appoval.

the pie fomlae a whih he monhl anhe ae epaable in hae i he lee of:

150% (o in he ae of he niial tanhe, 170%) of he aveae of he dail aveae volme-

weihed pie (VWP) of he compan odina hae fo he 20 bine da pio

o he dae of he aeemen. thi ha been allaed a $0.1325 fo he monhl anhe

and $0.1502 fo he niial tanhe; o

92.5% of he aveae of 5 dail VWP pe shae din a peied peiod pio o he

repamen ae of ha tanhe.

Additional Safeguards. Banee ha addiional afead aain dilion in ha:

Banee an epa a anhe in ah, a 105% of he fae vale of he anhe, ahe han

in hae, and eminae he aeemen if he pie a whih Banee wold be epain a

anhe hae wold be lowe han a peied oo pie;

whee Banee ma no epa a anhe in hae de o he abene of he elevan

haeholde appoval, i ma epa i in ah, ahe han hae, b pain 110% of he fae

vale of he amon oandin;

Banee ma op o epa in ah, ahe han hae, he amon of he niial tanhe

oandin a an ime b pain 120% of he fae vale of he amon oandin;

Banee alo ha poeion if he hae pie oe above a peied eilin pie, in

ode o ene ha i i no iin hae a inianl nde pevailin make pie;

Banee ha in plae ani-dilion poeion whee an anhe anno exeed an aeed

peenae of i make apialiaion; and

Banee an eminae he aeemen in i enie wiho ae b pain a

eminaion fee.

Zero Interest Rate and Focus on Capital Appreciation. the compan i pain zeo inee on

an fnd oandin. the Fnd en will depend on Banee hae pie appeiaion.

spintee wa aned 12,000,000 nlied opion ha ae exeiable a $0.1325 and expie

on 22 Feba 2013.

Fees Paid in Shares. the compan aeed o pa a fee fo he poviion of he faili, aied

b an ie of 7.5 million hae.

Facility is Subordinated, and Other Funding Opportunities. the faili i no eed aain

he compan ae. 7 million Banee hae have been ied and, bje o haeholde

appoval, an addiional 5 million Banee hae will be ied, a ollaeal o he faili.


22/119




sbje o obainin haeholde appoval, he ollaeal hae will be anelled b he compan

a he end of he aeemen, o alenaivel he compan ma eeive a ah pamen eqal o

92.5% of he aveae of ve dail VWP pe shae din a peied peiod pio o he dae of

pamen. the monhl anhe ae laied a bodinaed deb and Banee ha eained he

ih o in an ohe indebedne ha i enio, o pai pa wih, he spintee faili p o

an amon of $30.0 million, and an ohe (nlimied) deb ha i jnio o he spintee faili.

the faili i no bje o an nanial ovenan ohe han hoe deibed in hi mma.

the compan and i manaemen ae onian of he diliona effe of hi faili. the Boad

eview he faili in elaion o i apial eqiemen on a monh o monh bai.

Production Hedging

in he epoin peiod he compan implemened a podion hedin faili ove i

podion fom he 65% owned Pompano poje loaed in he glf of exio.

the podion hedin i in he fom of an ene swap ha ommened on 1 pil 2010 and

eminain on 30 sepembe 2011 a a pie of us$4.36 / mmb. thi ompaed o a pie of

us$3.87 / mmb a he ime he hede wa implemened. ll pie efe o he Hoon shippin

channel ndex.

Pie aed above ae baed on a million Biih themal uni (Btu) bai, whih i

appoximael eqal o a hoand cbi Foo (cF). thi i a nanial ona ha eqie

no phial delive of a.

Acquisitions

the compan onine o ae aqiiion opponiie in boh laka, he Lowe 48

and inenaionall.

Debt

he dae of hi epo he compan had a fll dawn $1.0 million loan faili wih aqaie

Bank Limied. thi i de fo epamen on 30 sepembe 2010.

the compan nalied a us$1.495 million Lee of cedi (Lc) wih aqaie Bank Limied

o aif i bondin obliaion fo he Pompano Podion Failiie. the Lc will be amoied

ove he nex 18 monh o ha a he end of he peiod he Lc i ah oveed.

OPerating and deVeLOPment StrategyBanee plan o ineae he lon-em vale of i pofolio b developin i eeve and

owin i ae. ffeive ik manaemen will be iial o he e of hee effo.

Banee ha eaed a rik and xpoe maix (pponi rik aximm dolla o of

poke) ha depi he pe of opponiie on whih he ompan plan o fo.


23/119


the ae i eneed on poje ha fall onenain on:

1. qiin poiion in low-ik Pu and reoe developmen and known podin

popeie (tpe ) when piin, imin and ae i opimal.

2. evelopin low ik exploaion (tpe B and c) and exploiaion opponiie in he

Low co/Low rik eld.

3. ein and poeniall leveain Low co/Hihe rik (and hihe-ewad) exploao

poje (tpe ), whee appopiae.

A: PD AD EoCE PlA

thee opponiie ae dened a pope wih exiin o pio podion hio ha have o

be developed. thee pla ae low in ik and have a hihe hane of e in eneal. Howeve,

he en o i eneall hihe, and well m pefom well. thee pla eqie moe de

diliene pailal in ndeandin he pa diibion, he impa of podion ae and

ompleion paie.

Banee ne will ee o eam wih opeao who have pei appliable eld expeiene inhee pe of opponiie and who ndeand he enineein pifall.

Banee ne will pe hee opponiie whee he hane of e i onideed o be

eae han 75 peen baed on ehnial ieia and whee i onide hee i an opeao wih

a ood ak eod in he pla.

thee exploiaion pla pe hold have a o iked eeve poenial in exe of 10 BcFe wih

he poibili of povin p addiional Pu dillin loaion and a poenial en on invemen

of 3 o 5 ime invemen.

B: E-CoPlEtio AD BEiD-PiPE EEVE

thee opponiie ae dened a pope wih exiin o pio podion hio ha

have been ovelooked. thee pla ae aain lowe in ik and have a hihe hane of e

in eneal.

the ke i o ndeand he pio developmen and ompleion hio. the bie ik i in

e-enein old well and in ndeepoin of ompleion aiviie of pio opeao and

ompleion paie.

Banee ne will pe hee opponiie whee i onide he hane of e o be

eae han 75 peen baed on ehnial ieia. xploiaion pla pe hold have a o

iked eeve poenial eae han 2 o 10 Bfe wih he poibili of povin p addiional Pu

dillin loaion and a poenial ndioned en on invemen of 3 o 5 ime invemen.


24/119




C: iElD oEt AD CEt PoDCtio tED

thee opponiie ae dened a new pope in poven podin end, offein exiin

dioveie. thee pla ae lowe in ik and have a hihe hane of e in eneal. the keeoloial elemen of ap, eevoi and eal hold be well domened.

Banee ne will pe hee opponiie in poven podin aea whee he hane of

e i onideed o be beween 50 and 70 peen baed on ehnial ieia.xploaion pla

pe hold have a o iked eeve poenial of a lea 5 o 50 Bfe, wih he abili of povin

p addiional Pu dillin loaion, and a poenial ndioned en on invemen of 5 o 10

ime invemen.

D: ExPloAtio PlA

Banee ne dene i exploaion ae a dillin new pope in poven podin

end o pla. xploaion ha a wide diibion of ae pe: an mean ank wilda

dillin in a bain o aea wih lile exploaion hio, o i an efe o ve hih-o pla h a

deepwae exploaion effo o eoaphiall hallenin pla in monain bel o in he ai.

Banee ne will pe exploaion opponiie in poven end whee i onide he

exploaion hane of e o be beween 30 and 70 peen baed on ond ehnial ieia.

xploaion pla pe hold have a o iked eeve poenial in exe of 20 BcFe wih

banial pide and a poenial ndioned en on invemen of 10 o eae.

PoJECt GEEAtio

the oil and a ind in he us i evied b a op of oaniaion olleivel known a

Poje geneao. Poje geneao a a pima pode of poje o he make plae.

ke omponen of he owh ae of a compan h a Banee i he abili o ae

and mainain a pipeline of qali poje o a o dill and develop. theefoe fomin loe

elaionhip wih Poje geneao i ineal o he e of a compan like Banee.

Banee ha loe elaionhip wih a nmbe of poje eneao whih i mee on a ela

bai o eview poje whih mih mee he compan ik and developmen ieia.

Banee and illennim exeed a aei alliane whee Banee ha he opponi

o eview and phae poje in illennim poje inveno. illennim xploe, LLc wa

fonded in 1995 in Hoon, texa, us b clin Wainwih and Jeff spol. illennim i

a pope eneao whih peialie in he ideniaion of evelopmen Poje (tpe ),re-compleion Pope (tpe B) and xploaion Pope (tpe ).

n aqiiion of an poje fom he illennim inveno Banee inend o offe fo ale a

wokin inee o hid paie and eain boh a wokin inee and pomoe inee.

n hi ole Banee ne will be ain a a wholeale of poje fo he make plae.


25/119


PEEED PPliE

ne of he ke and majo diffeene beween Banee and i ompeio will be o

elaionhip wih o Pefeed spplie. thee ae pplie ha have aeed o wok wih

nde peial inenive em. the ae willin o p i and/o ohe oileld eoe ino deal

in exhane fo eqi, e pamen fom podion o ohe novel pamen and inenive

plan. thee innovaive pamen plan an failiae apin poje and ein o foo in he

doo wih imel evie and apabiliie ha ohe an povide.

the Pefeed spplie i alo a ke o mainainin a mall aff and low ovehead. n oda

make, he spplie poee npaalleled knowlede and i eainl he expe in hoe evie

povided b hi ompan. ye man ene ompanie have lae aff peviin and feqenl

inefein wih he evie povide inead of helpin him pode he be pod. Banee

ha foed on a win-win elaionhip wih o spplie eam and elie on he spplie moe in-

deph knowlede of hi pod and evie. thi doe no mean he spplie i lef npevied;

ahe, he wok in one wih a Banee Poje anae o ahieve lowe o, moe apid

implemenaion and peio el.

the Pefeed spplie ole wok eqall well in ih make a i doe in down make.

the e of he deal hane, b hee i ample poof fom hoe who have woked hipoam in he pa ha he ae wok in all make and wih all ommodi piin.

We have inlded a nmbe of en Pefeed spplie in hi eion. the inlde dillin

onao, wellhead pplie, evie povide and enineein m. iion ae enl

nde wa wih ompleion peiali enineein op ha peialize in povidin dillin

eninee, ompleion eninee and peviion of onion. B ilizin he Pefeed spplie

newok we an mainain a mall in-hoe eam and keep ovehead low, hee of he compan

ke Pefeed spplie elaionhip ae a follow:

Hercules Offshore Drilling Rigs and Services

n ah 2007, Hele annoned he aqiiion of tc fo us$2.3 billion whih nowmake hem:

he owne of he lae jak-p ee in he us glf of exio

he owne of he wold foh lae jak-p dillin ee.

the owne of he lae bae ee alon he us glf coa wih 27 i.

the owne of he lae lif boa ee wih 5 i.

the owne of nine land i.

the Pefeed spplie eemen wih Banee aanee Banee nfeeed ae o

mliple land, bae and offhoe i. povide Banee wih pefeenial ae o ome of he

glf of exio pemie i wih pefeenial piin.


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directOrS rePOrtBuccr rgy Lt

& ctrLL tts

yo dieo peen hei epo on Banee ne Limied (compan) and i onolled

eniie (oehe alled he gop o he onolidaed eni) fo he nanial ea ended

30 Jne 2010.

directOrS

the name of dieo in ofe a an ime din o ine he end of he ea ae:

. lan J. Boome on-exeive dieo chaiman

. ci . Bon anain ieo

. ean L. galleo Finane ieo

. s. Fank clbeon on-exeive ieo

. Ken r. Hoope xeive ieo peaion (reined 1 a 2010)

ieo have been in ofe ine he dae of hei appoinmen a deailed above o he dae of

hi epo nle ohewie aed.

CoPA ECEtA

the followin peon held he poiion of ompan eea a he end of he nanial ea:

Be avid Bell

Bell ha ove 30 ea expeiene in he pbli ompan envionmen and ha eved a a

dieo and ompan eea of sX lied ompanie din ha peiod. He i a fellow of cP

alia and hold a ae of Bine dminiaion.

Principal activities

the pinipal aiviie of he onolidaed eni din he ea wee he aqiiion, exploaion,

dillin and podion of oil and a.

thee wee no inian hane in he nae of aiviie of he onolidaed eni ha oed

din he ea.

Operating result

the gop eoded an afe ax lo of $4,391,471 (2009: ($13,386,940)) fo he nanial ea.

the anin befoe inee, ax, depeiaion, amoiaion and exploaion wie-off (BtX)

wa a lo of $1,030,041 (2009: $4,116,189).

Consolidated entity

30 June 2010 30 June 2009

Lo befoe ax ($4,391,471) ($11,989,975)

nome tax xpene / (Bene) - $1,396,965

Lo afe ax ($4,391,471) ($13,386,940)

he compehenive inome $709,776 ($734,296)

Total Comprehensive income ($3,681,695) ($14,121,236)

Review of Operations

nfomaion on he opeaion and nanial poiion of he gop and i bine ae andpope i e o in he anain ieo epo.


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& ctrLL tts

Dividends

o dividend wee paid o delaed ine he a of he nanial ea. o eommendaion fo

pamen of dividend ha been made.

Signicant changes in state of affairs & After Balance Date Events

sbeqen o he end of he nanial ea ended 30 Jne 2010:

1. n 12 Jl 2010 he gop ied 20,148,650 fll paid odina hae o he vendo

of sella il & ga, LLc o omplee he aqiiion of leae in he cook nle, laka.

thee hae ae eowed nil 31 eembe 2010 o he ompleion of a onhoe well, a

appoved a he xaodina geneal eein held on 7 Jl 2010

2. n 2 2010 he gop and spintee speial global nveo, LP aeed o amend

he onveion em on he onveible noe ied on 29 Jne 2010. unde he aeed

em he gop epaid $400,000 pl a mall pemim, and onve he balane $400,000

ino 9,367,681 fll paid odina hae.

3. n 12 Jl 2010 he gop ied 5 fll paid odina hae on he exeie of 5 lied

opion.

4. n 24 2010, he gop annoned ha i wholl owned bidia Banee

laka, LLc ha eneed ino a bindin aeemen wih chevon copoaion o aqie he

emainin 50% wokin inee ha i doen alead own in 2 leae on i oh iddle

gond shoal e in he cook nle, laka.

5. n 26 2010 he gop annoned ha lexande #1, bein he hid well o be

dilled in he Lee con poam i expeed o be dilled wihin 24 ho, a he dae of

hi epo he hoizonal dillin opeaion in oninin.

6. n 8 sepembe 2010 he gop ied 15,759,312 fll paid odina hae o spintee

speial pponiie Fnd, LP on he onveion of $550,000 fowaded o he gop on

he 6 2010.

7. n 8 sepembe 2010 he gop ied 47,550,000 nlied opion o gop emploee

and dieo nde he gop ieo and mploee pion Plan, he ieo opion

have been peviol appoved a he xaodina geneal eein held on 7 Jl 2010.

o ohe mae o imane have aien ine he end of he nanial ea whih

inianl affeed o ma inianl affe he opeaion of he onolidaed op, he

el of hoe opeaion, o he ae of affai of he onolidaed op in fe nanial ea.

Likely developments, prospects and business strategiesthe onolidaed eni will onine i ae o fo on he poeive expanion of oil and

a podion and eeve b aqiin inee in low-o, low-ik developmen popeie

ha poe inian ndeveloped p ide wih ae o exiin infae.

the onolidaed eni aniipae dillin a nmbe of i poje ove he nex 12 monh wih

he inenion of ineain and diveifin i en podion bae. the onolidaed eni i

alo ndeakin a poje aqiiion ae hoh he aqiiion of popeie a vaio us

sae and Fedeal aion wih he view o owin i pipeline of developmen poje ha i

onol and will opeae.

spei deail of likel developmen in he opeaion of he compan, pope and bine

aeie and hei expeed el in fe nanial ea have no been inlded in hi epoa he inlion of h infomaion i likel o el in neaonable pejdie o he compan.


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& ctrLL tts

ioAtio o DiECto & AAGEEt

lan Boome

.n.; F. ; Fc ; (London); n (Z)

lan Boome i a mealli wih ove 20 ea expeiene in he seonda eal nd and

20 ea expeiene in he inin nd. He had an exenive bakond in meal ain and

eel podion befoe joinin he minin ind a anain ieo of a majo alian coal

nd owned op.

He ha exenive knowlede of he inin nd amlaed hoh involvemen wih inin

ehnolo ompanie, ovenmen aenie and majo inenaional inin

ompanie in pomoin alian minin and developin lobal ade.

He i a ieo and chai of a nmbe of alian minin ehnolo

ompanie inldin iomine P Ld., nbe inin sevie Ld.; WokPa

gop Ld, and Powe P Ld.; he chai of he alian minin ehnolo

expo op, mine; pevio chai of he alian govenmen ion

enda pomoin inin tehnolo; and ep chai of he wold lae

nene baed minin poemen ompan, Qadem.

n ew Zealand, he i chaiman of crL ne Limied, and a ieo of he

sae owned oal minin ompan solid ne Limied.

He alo i on he ineal seo dvio conil of he csr; he ineal

own unde aional Flahip advio ommiee of he csr; he inin

dvio commiee of ade ; and i a ieo of he ew Zealand coal

oiaion.

He wa peviol he c and ep chaiman of he Fedeal govenmen

Heav nineein and nfae ion enda iniiaive.

He i eained a an advie o a nmbe of alian and nenaional inin,

inin sevie and nineein companie, and aoiaed oaniaion.

n 1999 he wa awaded he Wepa/nie of xpo awad fo minin and

in 2000, he de of alia () fo evie o minin. n 2005 he wa

awaded he Peiden wad fo onibion o he developmen of

he alian minin ppl eo.

Other Directorships o Listed Companies in the three years ending 30 June 2010:

Boome i chaiman of sX lied ompan imodel reoe Ld and

ndooal Limied. n he la hee ea ha alo eved on he boad of Jpie

ine Limied a poiion fom whih he epped down in ovembe 2008.

Interests in shares and options:

dina hae: 400,000

Lied opion: 100,000

unlied opion 1,750,000


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& ctrLL tts

. ci . Bon anain ieo and chief xeive fe

reonied b he oil and a ind a pima move of he ind ino he deepwae

fonie, ci Bon wa a fonde of eepstr, texao oopeaive deepwae ehnolo-developmen vehile. He efll dieed hi poje fo 5 ea.

Pio eponibiliie inldin evin a Fonde/Peiden/cu fo za ne sem,

Peiden of gan Pideo aine iviion and of toal offhoe Podion sem. He i alo

eonied a an innovao in he appliaion of new onep and ehnoloie in he oil and a

ind.

thee have inlded innovaive oain em dein fo oh sea

opeao and he implemenaion of one of he wold lae b-

ea podion onol em in he 1980. Hi leadehip ha been

haaeied b willinne o eek o innovaive olion fo nolvable

poblem and abili o ae he bi pie. n deph inenaionalexpeiene inlde livin and wokin in he unied Kindom, owa and

Bazil. He ha alo ompleed inenaional poje in We fia, Japan

and ope and ha exenive poje expeiene in he deepwae glf of

exio. He i 55 ea old.


dina hae: 13,428,250



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& ctrLL tts

. ean L. galleo Finane ieo

ean galleo, ae 42, bin manaemen, makein and apial-

fomaion expeiene o Banee fom an alian pepeive. galleo idenied and oh o he Banee manaemen eam in

Hoon and idenied hem a he oe of an opeaion whih wold be

aaive o alian inveo and fom he bai of a efl ompan

lied on he sX.

galleo ha ove 15 ea expeiene in he alian apial make

plae wih die expeiene in manain sX lied ompanie. He ha

paila expeie in aiin boh deb and eqi apial, plannin and

peviion of exploaion bde, haeholde elaion, opoae

ovenane and ompliane nde elao famewok.

Other Directorships o Listed Companies in the three years ending30 June 2010:

. galleo wa he chaiman of sX lied Ve nvemen Limied

(eined pil 2008), onin sa Holdin (alia) Limied (eined

2008), chaiman of sX lied te Limied (eined Jl 2008) and

yellow rok reoe Limied (eined sepembe 2010).

Special responsibilities:

galleo i eponible fo adviin he boad on all opoae and

aei mae elain o he compan inldin hoe in epe o

fndin he compan and elao mae (copoaion and sX

Liin rle) in alia. He i eponible o he boad fo implemenin

an effeive opoae and haeholde ommniaion ae and i

he compan pima poin of ona o he invemen ommni in

alia.


dina hae: 12,450,003



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& ctrLL tts

. s. Fank clbeon on-exeive ieo

.B.., P..

s. Fank clbeon, i Peiden & c of rimk conlin gop, a

400-peon foeni onlin and enineein m, headqaeed in

Hoon.

clbeon, ae 69, beame Peiden and chief xeive fe of

rimk conlin gop, n., in 1987. He wa peviol manain

dieo and hief exeive ofe of Pae conlan, n., whee he had

woked ine 1966 in a eion of poiion inldin peiden of rok

onain diviion, vie peiden of enineein, and manain pane, He

bean hi aee wih shell il compan in 1969 a a poe eninee and

opeaion oodinao.

clbeon i a 1960 adae of oh caolina sae univei wih

a B.s. in hemial enineein and a 1966 adae of he univei of

Hoon wih an .B.. He ha exenive expeiene in he hdoabon

poein and onmin indie, inldin eonomi and feaibili

aemen; envionmenal and oxi/hazado wae evalaion

and olion; poe enineein and opeaion; ompe em

developmen; vene anali and ommeialiaion; aqiiion,

mee, diveie and nanial anale.

He ha moe han 30 ea of expeiene in ene and bine onlin,

inldin nmeo ainmen a pinipal in hae of majo die and

evalaion. He ha made nmeo hih-level peenaion and povidedexpe epo, inldin expe wine eimon befoe o and he

Fedeal ne relao commiion. He i a eieed pofeional

eninee in texa and Floida, and he i a membe of he meian nie

of chemial ninee.


dina hae: 4,084,118



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& ctrLL tts

BCCAEE EoCE AAGEEt tEA

nd rike peaion anae

31 ea expeiene in enineein and manaemen boh inenaionall and he us;

xenive expeiene in dillin and wok-ove aiviie and a poven eod of efll

in new ehnoloie;

Pblihed vaio ehnial pape elain o enineein dein and hold eveal ind

paen fo i and down-hole eqipmen ha he ha developed;

Held poiion wihin shlmbee and helped develop hei nke dillin

evie bine and pioneeed eal effo dillin well in oiled bin;

Peolem nineein deee fom Loiiana teh univei.

ga rineha xploaion anae

35 ea of expeiene in exploaion, exploiaion and podion boh in he us

and inenaionall;

il and a exploaion and podion expeiene in sohea ia, soh meia, onhoe

us glf coa and offhoe us glf of exio in boh deep and hallow wae;

sefll neoiaed exploaion aeemen wih foein ovenmen a well a

aeemen beween inveo and &P ompanie;

embe of eveal pofeional op h a he meian oiaion of Peolem

geoloi (Pg), Hoon geoloial soie (Hgs), soh Ween geoloial soie

(sWgs), and soie fo sedimena geolo (sP).

reieed wih he sae of texa a a Liened Peolem geoloi and i eonied b he

Pg a a ceied Peolem geoloi;

B.s. in geolo fom he univei of klahoma.

g. clin Wainwih, J. xeive Vie-Peiden, peaion & Bine evelopmen

37 ea expeiene opeain popeie offhoe glf of exio and onhoe texa

and Loiiana;

xenive expeiene a a eld eninee eponible fo developmen poje dein

inldin eld mappin, eeve, well dillin dein and peviion, eonomi and poje

peenaion fo ale;

sefll neoiaed anaion wih lae and mall independen opeao a well a

xxon-obile, BP-moo, shell and chevon-texao;

Pinipal of natexa an peao of poje inldin he Pompano Poje;

Peolem nineein deee fom Loiiana sae univei.


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& ctrLL tts

BCCAEE AlAA AAGEEt tEA

Jim Wa Peiden & c

10 ea die expeiene in laka; co- Fonde sella il & ga and renaiane laka;

xenive manaeial and opeaional expeiene wih texao, union texa (rc), ien

Peolem and renaiane laka;

ajo Poje expeiene wih oh sea Pipe B and salie Field and he lpine developmen

on he oh slope, laka;

Bsch, he hio sae univei, B, P, aen ew exio univei.

llen Hkaba Vie Peiden xploaion & evelopmen

25 ea die expeiene in laka; co- Fonde sella il & ga and renaiane laka; 32 ea wih rc, union texa (rc) and conooPhillip;

sinian exploaion ee wih rc, union texa, conooPhillip and

renaiane laka;

ioveed lae onhoe oileld in he la 20 ea lpine eld, noh-eaen bonda of

he Pr in laka and 3 ohe eld in laka ha ae now in podion;

Bs, sohen ehodi univei, s, univei of soh caolina.

ak Land Vie Peiden Land & Bine evelopmen

14 ea die expeiene in laka, 5 ea loaed in laka; co- Fonde sella il & ga,

and renaiane laka;

25 ea wih rc and 6 ea wih renaiane laka, inldin die cook nle land

expeiene;

34 ea of divee expeiene in land, inenaional neoiaion, bine developmen

and makein.

Plled oehe land poiion fo lpine developmen;

BB, PL, univei of klahoma, Jlian rohbam wad.

Vija Bania Vie Peiden evelopmen

12 ea die expeiene in laka; xenive expeiene in eld developmen, inldin

lpine developmen;

Fome reevoi ninee wih shell, union texa, Blinon reoe and renaiane

laka;

30 ea of domei and inenaional expeiene in all ape of eevoi enineein;

Ph, univei of tla.


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ave ohe chief geoloi

25 ea die expeiene in laka; 14 ea loaed in laka;

xploaion geoloi wih rc; snh diove in he cook nle;

Leadin expe in he cook nle bain;

xenive eoloial ve expeiene wih us geoloial sve, rc and renaiane

laka;

s, Wane sae univei.

cai ooe chief geophii

6 ea die expeiene in laka wih Benhmak xenive woldwide eophial

expeiene wih glf il, majo, independen and onlin;

s, geophial Pofeional nineein, coloado shool of ine.

avid Flon Vie Peiden, Finane

Peviol cF & VP Finane fo capian nenaional il copoaion, lied on he yX

tc. i in copoaion effo o aie apial;

ve 24 ea of oil & a aonin & nane expeiene wih ineain eponibili wih

union texa Peolem and eenl VP Finane wih renaiane laka, LLc;

BB, texa & univei.

EEtiG o DiECto

the nmbe of boad meein of Banee ne Limied dieo, held din he nanial

ea ended 30 Jne 2010, and he nmbe of meein aended b eah dieo wee:

Directors Meetings

Attended Eligible to attend

lan Boome 6 6

ci Bon 5 6

Ken Hoope (1) 6 6

ean galleo 6 6

s. Fank clbeon 6 6

reined 1 a 2010

iDEiiCAtio AD iACE o DiECto, oiCE AD ADitothe compan ha eneed ino an aeemen o indemnif dieo and ofe and din he

nanial ea and ha aken o an inane poli o ine eah of he dieo and ofe o fome

dieo and ofe aain liabiliie fo o and expene ined b hem in defendin an leal

poeedin aiin o of hei ond while ain in he apai of dieo o ofe of he compan,

ohe han ond involvin a wilfl beah of d in elaion o he compan. ndemni ha no been

povided fo adio. nane pemim of $41,968 ha been paid o aed b he gop.

EVioEtAl iE

the onolidaed eni i bje o he envionmenal law and elaion impoed b ahoiie

in us and in paila he law and elaion of texa and Loiiana in epe o oil and a

exploaion and podion.

thee wee no nvionmenal ie ha aoe din he 12 monh o 30 Jne 2010.


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remuneratiOn rePOrt (audited)the remneaion repo i e o nde he followin main headin:

1. Piniple ed o deemine he nae and amon of emneaion

2. eail of emneaion

3. sevie aeemen

4. shae-baed ompenaion

the infomaion povided nde headin 1 o 4 inlde emneaion diloe ha ae

eqied nde onin sandad sB 124 relaed Pa iloe. thee diloe have

been anfeed fom he nanial epo and have been adied.

1. PiCiPlE ED to DEtEiE tE AtE AD Aot o EEAtio

the pefomane of he onolidaed op depend pon he qali and ommimen of he

dieo and exeive. the philooph of he dieo in deeminin emneaion level i o:

e ompeiive emneaion pakae o aa and eain hih alibe emploee;

link exeive ewad o haeholde vale eaion; and

eablih appopiae demandin pefomane hdle fo vaiable exeive emneaion.

the Boad ha no eablihed a remneaion commiee o eview and make eommendaion

o he fll Boad on he compan emneaion poliie, poede and paie.

the fll Boad eablihed he gop emneaion poliie, poede and paie and eo and dene he individal pakae offeed o ke manaemen peonal, inldin lon

em inenive o ewad ke manaemen peonal o haeholde vale eaion b offein

emploee opion and vein ondiion linked o he gop eanin; i abili o pa dividend

o he ae of dividend paable and i abili o epa o i haeholde an exe apial.

n aodane wih copoae govenane be paie (reommendaion 8.2), he e of

non-exeive dieo and exeive emneaion i epaae and diin a follow.

a. Non-executive directors remuneration

Fixed Remuneration:

the Boad eek o e aeae emneaion a a level ha povide he compan wih he

abili o aa and eain dieo of a hih alibe, whil inin a o ha i aepable o

haeholde.

the sX Liin rle peif ha he aeae emneaion of non-exeive dieo hall be

deemined fom ime o ime b a eneal meein. the amon of aeae emneaion oh

o be appoved b haeholde and he manne in whih i i appoioned amon dieo i

eviewed annall. the Boad onide advie fom haeholde, and ake ino aon he fee

paid o non-exeive dieo of ompaable ompanie, when ndeakin he annal eview

poe.

the compan inend o eqe haeholde appoval a he 2010 nnal geneal eein o e

hee fee a $250,000 pe annm.


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& ctrLL tts

ieo emneaion i inlive of ommiee fee. the followin ne annal fee paid o non-

exeive dieo ae:

Fixed Fees1 July 2009 - 30 June 2010

$

Base Fee

chaiman $88,000

he non-exeive dieo $14,152

Variable Remuneration:

the compan povide dieo wih inenive deined o alin hei emneaion wih he

inee of haeholde. thi i done hoh iin opion o aqie odina hae in he

compan. the nmbe and he em of he opion ied ae deemined b he fll boad and

appoved b haeholde in a eneal meein of membe.

b. Company executive and executive director remuneration

remneaion oni of xed emneaion and vaiable emneaion, whih ompie ho-

em and lon-em inenive heme.

Fixed Remuneration:

Fixed emneaion i eviewed annall b he dieo. the poe oni of a eview of

elevan ompaaive emneaion in he emplomen make and wihin he compan and, whee

appopiae, exenal independen advie on poliie and paie i obained b he Boad.

senio manae ae iven he opponi o eeive hei xed (pima) emneaion in a vaie

of fom and ae offeed he opponi o ene ino ala aie aanemen wih hecompan whee appopiae. i inended ha he manne of pamen hoen will be opimal fo

he eipien wiho eain addiional o fo he onolidaed op.

Variable Remuneration:

(i) sho-em inenive (st Pamen)

xeive ae e ho-em (annal) inenive (st) ae dependin on he aonabiliie of

he ole and impa of hei pefomane on he oaniaion o bine ni pefomane. ah

ea he dieo onide, baed on a eommendaion fom he fll boad, he appopiae ae

and ke pefomane indiao o link he st plan and he level of pamen if ae ae me. thi

inlde ein a maximm pamen nde he st plan, and minimm level of pefomane o

ie pamen of he st.

n Jl 2009 eah of he compan us baed emploee aeed o anel hei emplomen

ona inldin he 30 Jne 2008 st pamen in en fo paiipaion in an oveidin oal

poam ove he compan pofolio of ae. thi wa oh b he compan o a o ede

i opeaional expene and oneve ah eeve. the st Pamen fo he 12 monh o 30

Jne 2010 wee onideed in he onex of he above oneion and he eded emneaion

of hoe emploee.

cenl, he st ae and pefomane indiao ae linked o he opeaional pefomane

inldin he nanial pefomane of he onolidaed op. the ae no diel linked o

movemen in haeholde wealh a deemined b he compan hae pie o dividend paid.


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(ii) Lon-em inenive

the compan povide lon-em inenive o enio exeive in a manne ha alin hi

elemen of emneaion wih he eaion of haeholde wealh. thi i done nde he em of

he ieo mploee shae pion Plan (sP) whih povide fo exeive and ohe

emploee o be ied wih opion o aqie hae in he compan a no o. the nmbe

and he em of he opion ied ae deemined b he dieo afe onideaion of he

emploee pefomane and hei abili o onibe o he ahievemen of he compan

objeive.

n 30 Jne 2009 all holde of he sP opion who wee ill emploed b he compan

aeed o a anellaion of hei opion fo no onideaion. thi wa done o demonae o

haeholde ha dieo and aff wee alinin hemelve moe loel wih haeholde who

had ffeed apial lo in he pevio 12 monh. the compan ied new opion nde he

sP in sepembe 2010.

he opion onfe a ih b no an obliaion on he eipien of he opion, he dieo do

no onide i neea o eablih a poli in elaion o he peon limiin hi o he expoe

o ik a a oneqene of ownin he opion.

2. DEtAil o EEAtio

eail of he emneaion of he Ke anaemen Peonnel (a dened in sB 124 relaed

Pa iloe) ae e o in table 1 whih follow.

the Ke anaemen Peonnel of Banee ne Limied, inldin he dieo and he

followin onolidaed op exeive, have ahoi and eponibili fo plannin, diein

and onollin he aiviie of he onolidaed op.

clin Wainwih - xeive Vie-Peiden, peaion & Bine evelopmen

(Banee reoe)

Jim Wa Peiden, (Banee laka)

ak Land xeive Vie-Peiden, Land & Bine evelopmen (Banee laka)

llen Hkaba xeive Vie-Peiden, xploaion & evelopmen (Banee laka)

ga rineha xploaion fe

nd rike peaion fe

eville Hen chief xploaion fe (eined 31 Jana 2010)

thee exeive oehe wih he dieo ompie he named elevan onolidaed op

exeive who make o paiipae in makin deiion ha affe he whole, o a banial pa,

of he bine o who have he apai o affe inianl he gop nanial andin.


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Table 1: Details of Remuneration Directors and Key Management Personnel

Short-term Benets Other BenetsShare-based

Payments- options Total

Percentage

PerformanceBasedBonus

Payments

Percentage

ShareOption-

basedPayments

Cash Salary& Fees

STIPayments

Termination

BenetsPrescribedBenets(1)

Year ended 30 June 2010

Non-executive directors

lan Boome $88,000 il il il il $88,000 il il

s. Fank clbeon $14,152 il il il il $14,152 il il

Executive directors

ci Bon $219,003 $141,521(2) il $18,650 il $379,174 37.3% il

Ken Hoope (3) $150,960 $56,608 $149,436 $15,565 il $372,569 15.2% il

ean galleo $282,125 il il $13,326 il $295,451 il il

Other key management personnel

clin Wainwih $147,639 $70,195 il $17,473 il $235,307 29.8% il

eville Hen (4) $94,115 il $22,304 $10,913 il $127,332 il il

Jame Wa $48,117 il il $4,099 il $52,216 il il

ak Land $48,117 il il $5,388 il $53,505 il il

llen Hkaba $48,117 il il $3,397 il $51,514 il il

ga rineha $124,692 il il $4,626 il $129,318 il il

nd rike $186,129 $22,643 il $6,340 il $215,112 10.5% il

Total $1,451,166 $290,967 $171,740 $99,777 Nil $2,013,650 14.4% Nil

1. Fo us baed exeive hi inlde Healh nane and ca llowane. Fo alian baed exeive hi inlde a ca llowane.

2. a 30 sepembe 2010 an amon of $117,746 had been aed and $23,775 had been donaed o haiie a Bon dieion.

3. reined 1 a 2010. the st and teminaion pamen wa aeed a a elemen o hi emplomen ona.

4. reined 31 Jana 2010.

Year ended 30 June 2009

Non-executive directors

lan Boome $78,919 il il il $15,387 $94,306 il 16.3%

s. Fank clbeon $28,140 il il il $15,259 $43,399 il 35.2%

Executive directors

ci Bon $404,515 il il $41,391 $115,970 $561,876 il 20.6%

Ken Hoope $293,604 il il $29,423 $57,985 $381,012 il 15.2%

ean galleo $326,098 $62,243 (1) il $15,664 $30,775 $434,780 14.3% 7.1%

Other key management personnel

eville Hen $306,491 il il $29,423 $57,985 $393,899 il 14.7%

clin Wainwih $243,412 il il $4,242 $143,978 $391,632 il 36.8%

ddie Piad (2) $176,766 $152,539 (1) il $23,503 $15,387 $368,195 41.4% 4.2%

Total $1,857,945 $214,782 Nil $143,646 $452,726 $2,669,099 8.0% 16.9%

1. ed and npaid a a 30 sepembe 2009

2. reined 19 ovembe 2008. the st pamen wa aeed a a elemen o hi emplomen ona.


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3. EViCE AGEEEt

the compan ha no fomal evie aeemen in plae a hi ime. tem and ondiion of

he appoinmen and eiemen of dieo ae e o in a lee of appoinmen whih oveemneaion, expeaion, em, he poede fo dealin wih oni of inee and he

availabili of independen pofeional advie.

the followin i a mma of he majo poviion of he aeemen elain o emneaion

of he xeive ieo and Ke anaemen Peonal ae e o below, all he followin

aeemen ae on a monh o monh bai wih no dened daion nle aed ohewie:

ci Bon anain ieo and chief xeive fe

Bae Fee us$240,000 eviewed annall

Bene Healh nane

ean galleo Finane ieo


Bene us$1,200 pe monh ca llowane

clin Wainwih xeive Vie Peiden of peaion and Bine evelopmen

(Banee reoe)


Bene Healh nane

nd rike peaion fe (Banee reoe)

Bae Fee us$155,000 eviewed annallBene Healh nane

ga rineha xploaion fe (Banee reoe)


Bene Healh nane

Jame Wa Peiden and chief peain fe, Banee laka LLc


Bene Healh nane

us$600.00 pe monh ca llowane

xpie 1 pil 2011

ak Land xeive Vie-Peiden, Land & Bine evelopmen (Banee laka)


Bene Healh nane


xpie 1 pil 2011


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llen Hkaba xeive Vie-Peiden, xploaion & evelopmen (Banee laka)


Bene Healh nane


xpie 1 pil 2011

n mal aeemen he emplomen aeemen of ci Bon, clin Wainwih, Ken Hoope,

eville Hen and rihad Loomi wee eminaed on 17 Jl 2009, appoximael 16 monh

befoe he wee de o expie. the elemen aeemen beween Banee reoe, LLc and

he above exeive inlded he followin:

edion of monhl ompenaion b appoximael 50%;

non pamen of he eained st bon fom he 2008 nanial ea; and

he non pamen of an eminaion bene a deibed above;

n en fo he above oneion b he exeive he compan aned a 1.0% oveidin

oal inee (rr) ove he compan pofolio of poje a ha ime, o be pli on a po-aa

bai beween hoe exeive.

Executive Overriding Royalty Interest (ORRI)

ci Bon 0.285%

Ken Hoope (1) 0.230%

clin Wainwih 0.230%

eville Hen 0.230%

rihad Loomi 0.0025%

Total 1.000%

1. the eminaion pamen of $149,436 o Ken Hoope a olined in table 1 ee a phae of hi hae in he rr.

The following projects are subject to the ORRI:

Project Working InterestPrevious Net

Revenue InterestNew Net Revenue

Interest (1)

Pompano 65.00% 47.0275% 46.258%

swodh 86.67% 66.733% 65.963%

cobia 86.67% 66.733% 65.963%

redh 65.00% 49.075% 48.305%

tan 100.00% 78.000% 77.230%

tna 100.00% 78.000% 77.230%

Jaa 100.00% 78.000% 77.230%

cove eep 32.00% 24.000% 23.746%

rb 35.00% 26.250% 26.058%

Lee con 52.50% 39.375% 38.605%

1. thi i afe he phae of Ken Hoope inee a deailed above.


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4. AE-BAED CoPEAtio

pion o aqie hae

pion ae ied o dieo and exeive a pa of hei emneaion. the opion ae no

ied baed on pefomane ieia, b ae ied o he majoi of dieo and exeive o

ineae oal onene beween exeive, dieo and haeholde.

Paiipaion in he sP i a he Boad ole dieion. Fo eah opion ie, he Boad

peie he vein peiod, exeie pie and exeie peiod in aodane wih he poviion

of he heme. the exeie pie of he opion i he pie o be deemined b he boad a i ole

dieion, b no le han a pemim of 10% of he pevailin make pie of he hae of he

compan on he sX a he ime of ie.

ah opion enile he holde o bibe fo one fll paid odina hae in he compan a he

ie pie peied, a an ime fom he ie dae nil he expi of he opion bje o an

vein eqiemen. the opion holde ae no eniled a a mae of oe o paiipae in an

hae ie of he compan. pion aned nde he sP a no dividend ih o voin

ih and ae ied fo nil onideaion.

pion ied o dieo ae no ied nde he em of he sP b ae ied on em

ha ae appoved b haeholde in a geneal eein. a 30 Jne 2010 hee wee no opion

ied o eihe dieo o nde he sP. n 7 Jl 2010 he compan eeived appoval o

ie opion o dieo, a fhe ie of opion nde he sP wa made o he compan

exeive on 7 sepembe 2010.

the eipien of he above opion and sP opion wee a follow:

Executive /Director Position

OptionsIssued

lan Boome ieo 1,750,000

ci Bon anain ieo 6,000,000

ean galleo Finane ieo 6,000,000

Fank clbeon on-xeive ieo 1,750,000

Be Bell compan seea 250,000

clin Wainwih VP peaion & Bine evelopmen (Banee reoe) 4,000,000

ga rineha xploaion anae (Banee reoe) 3,000,000

nd rike peaion anae (Banee reoe) 3,300,000

Kendall William Finanial conolle (Banee reoe) 1,000,000

Ken Hoope (1) Fome ieo 2,000,000

Jim Wa Peiden & c Banee laka, LLc 3,300,000

ak Land xeive Vie-Peiden, Land & Bine evelopmen (Banee laka) 3,300,000

llen Hkaba xeive Vie-Peiden, xploaion & evelopmen (Banee laka) 3,300,000

cai ooe chief geophii (Banee laka) 2,150,000

avid Flon Finanial conolle (Banee laka) 2,150,000

ave ohe chief geoloi (Banee laka) 2,150,000

Vija Bania Vie Peiden evelopmen (Banee laka) 2,150,000

1. Hoope eined on 1 a 2010 and nde he em of he compan sP he opion ied o him will lape nle

onveed on o befoe he 6 eembe 2010.


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DEoP oPtio tE

the above opion have he followin em:

xpi: 30 Jne 2013

xeie Pie: $0.10

Vein Hdle: 50% of he ieo and mploee pion will expie and be

fofeied if he compan ha no dilled and ompleed wo well a i

Lee con poje on o befoe 30 Jne 2013; and

50% of he ieo and mploee pion will expie and be

fofeied if he compan ha no dilled one onhoe well in o aond

he cook nle in laka, us on o befoe 30 Jne 2013

issuED oPtions

he dae of hi epo, he nied odina hae of Banee ne Limied nde opion

ae a follow:

Designation HolderExercise

Price Expiry DateQuantityon Issue

QuantityVested

BCCO Lied $0.10 30 ovembe 2012 177,731,318 177,731,318

BCCAK aqaie Bank Limied $0.11 2 Feba 2013 15,443,077 15,443,077

BCCAX spintee speial pponiie, LP $0.1325 22 Feba 2013 12,000,000 12,000,000

BCCAZ ieo & xeive (sP) $0.10 30 Jne 2013 47,550,000 23,775,000

in he ea ended 30 Jne 2010, no hae have been ied a a el of he exeie of he

opion ied nde sP o o haeholde (2009: il).

PoCEEDiG o BEAl o tE CoPA

o peon ha applied fo leave of co o bin poeedin on behalf of he compan

o inevene in an poeedin o whih he compan i a pa fo he ppoe of akin

eponibili on behalf of he compan fo all o an pa of hoe poeedin.

the compan wa no a pa o an poeedin din he ea.

CoPoAtE GoVEACE

the dieo ae eponible fo he opoae ovenane paie of he compan. the main

opoae ovenane paie ha wee in opeaion din he nanial ea ae e o in hecopoae govenane eion of he annal epo.


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o-ADit EViCE

the dieo ae aied ha he poviion of non-adi evie din he ea i ompaible

wih he eneal andad of independene fo adio impoed b he copoaion 2001. thedieo ae aied ha he evie diloed below did no ompomie he exenal adio

independene fo he followin eaon:

all non-adi evie ae eviewed and appoved b he fll boad pio o ommenemen o

ene he do no adveel affe he inei and objeivi of he adio; and

he nae of he evie povided do no ompomie he eneal piniple elain o adio

independene in aodane wih Ps 110: code of hi fo Pofeional onan e b

he onin Pofeional and hial sandad Boad.

the followin fee fo non-adi evie wee aed o he exenal adio din he ea

ended 30 Jne 2010:

geneal advie $3,500

tax dvie $22,835

$26,335

ADito iDEPEDECE DEClAAtio

n independene delaaion ha been povided b he compan adio, WHK Howah sdne.

op of hi delaaion i aahed o, and fom pa of, he nanial epo fo he nanial ea

ended 30 Jne 2010.

sined in aodane wih a eolion of he dieo.

lan Boome

chaiman

30 sepembe 2010


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cOrPOrate gOVernanceStatement


the boad of he compan i ommied o havin he hihe andad of ehial behavio

oehe wih an effeive em of opoae ovenane fo he Banee gop ommenae

wih he ize of he compan and he ope of i bine opeaion.

n aodane wih sX Liin rle 4.10.3, e o below i he sX copoae govenane

conil eih piniple of opoae ovenane (sX govenane Piniple) and deibed

aain eah i how he boad ha applied eah piniple and he eommendaion e o

wihin hem.

the compan i fll ppoive of he if no, wh no diloe baed appoah o ovenane

adoped b he sX govenane Piniple beae, ine alia, he eonize hee i no inle

model of opoae ovenane and ha ood opoae ovenane paie i no eied o

adopin all he eommendaion.

the boad ha adoped and omplied wih mo of he eommendaion b hee ae a nmbe

of eommendaion ha he boad, afe aefl eview, have no adoped. Fll deail of hee,oehe wih an explanaion of wh an alenae and moe appopiae appoah ha been aken b

he Boad, ae e o in he followin aemen.

PiCiPlE 1: lAiG oliD oDAtio o AAGEEt AD oVEiGt

compliane wih hi Piniple eqie he compan o eablih and diloe he epeive ole

and eponibiliie of boh he boad and manaemen.

Role of the Board

the compan oveall opoae objeive, a deemined b he boad, i o povide haeholde

wih aaive invemen en pinipall hoh enhanemen of apial.

n hi ead, he compan pima oal ae:

o be poable and pa dividend whih, ove ime, ow fae han he ae of inaion; and

o povide aaive oal en ove he medim o lon em.

the ole of he boad ppo he opoae objeive of he compan. the boad eneall e

objeive and oal fo he opeaion of he compan, oveee he compan manaemen,

eview he compan pefomane on a ela bai and monio i affai in he be inee

of he compan. the boad i aonable o i haeholde a owne of he compan.

the boad opeae nde a boad hae, available on he compan webie, whih domen

he ole of he boad olined above and he mae ha he

Documents

Buccaneer_Energy_Limited_-_Annual_Report_2010